GE Aerospace (GE) delivered a beat-and-raise quarter that would normally send investors into celebration mode. Instead, shares tumbled more than 5% on Thursday, proving once again that the stock market loves to keep everyone guessing.
The aerospace giant crushed fourth-quarter expectations with adjusted earnings per share of $1.57, well above analyst forecasts. Revenue came in at $11.865 billion, topping the $11.236 billion consensus estimate. For 2026, the company guided to adjusted EPS between $7.10 and $7.40 compared to the $7.12 estimate, with free cash flow projected at $8.0 billion to $8.4 billion. Management also indicated an adjusted tax rate below 17% and no planned debt repayment, as the company intends to refinance maturities coming due in 2026 and beyond.
What the Analysts Say
Bank of America Securities analyst Ronald J. Epstein kept his Buy rating intact with a $365 price target, clearly unshaken by the market's reaction. He pointed out that the earnings beat was driven by stronger-than-expected revenue and margins across the business.
The Commercial Engines & Services segment pulled in $9.468 billion, beating BofA's $9.031 billion estimate. The real story there was Services revenue, which surged 31% year-over-year thanks to higher shop visit volumes and increased spares output.
Meanwhile, Defense & Propulsion Technologies generated $2.839 billion in revenue, above the $2.628 billion forecast. Defense revenue edged up 2% as pricing and mix offset a 7% volume decline, while Propulsion jumped 33% on increased Avio volumes.
Epstein noted that GE Aerospace's 2026 outlook for both revenue and adjusted EPS compares favorably with BofA's own estimates, which makes Thursday's selloff all the more puzzling.
GE Price Action: GE Aerospace shares were trading down 5.52% at $305.81 at the time of publication on Thursday.
